Matilda Works for a Company with 1,000 Employees

question 53

Multiple Choice

Matilda works for a company with 1,000 employees. The company has a hospitalization insurance plan that covers all employees. However, the employee must pay the first $3,000 of his or her medical expenses each year. Each year, the employer contributes $1,500 to each employee's health savings account (HSA) . Matilda's employer made the contributions in 2017 and 2018, and the account earned $100 interest in 2018. At the end of 2018, Matilda withdrew $3,100 from the account to pay the deductible portion of her medical expenses for the year and other medical expenses not covered by the hospitalization insurance policy. As a result, Matilda must include in her 2018 gross income:

• A) $0.
• B) $100.
• C) $1,600.
• D) $3,100.
• E) None of these.

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Definitions:

Settle

To resolve or reach an agreement about a dispute or issue, often resulting in the cessation of legal proceedings.

Provisional Settlement

A temporary arrangement or agreement reached between parties, pending a final decision or settlement.

Unauthorized Use

The use of something, typically intellectual property or physical assets, without the permission or rights to do so.

ATM Card

A card used together with a personal identification number (PIN) to gain access to an automatic teller machine (ATM).